Abstract. An e xac t approach is developed to dete rmine the optimum machining conditions an d tool allocation decisions simultane ously to minimize the total production cost on a CNC turning machine . The re are multiple machining operations an d we consider a set of alte rnative cutting tool types for e ach operation. The e xisting tool manage me nt approache s at the syste m leve l fail to relate the tooling issues to the machining conditions, and ignore the tool availability and tool wear restrictions. Consequently, we not only improve the ove rall solution by e xploiting the interactions betwe e n these two decision makin g problems, but also preve nt any unfeasibility that might occur for the tool allocation problem due to tool conte ntion am ong the operations for a limite d number of tool type s by considering the mach ining operation, tool availability an d tool life limitations. The computation al results indicated that the ave rage computation time to find an optimum solution was 1.11 s, whe reas the maxim um time was 11.45 s, for a set of randomly ge nerated problems.